A.M. Best Places Rating of Northwind Holdings, LLC Senior Secured Notes Under Review.

OLDWICK, N.J. -- A.M. Best Co. has placed the debt rating of "aaa" of the $800 million of floating rate senior secured notes, due 2037 and issued by Northwind Holdings, LLC (Northwind Holdings), a Delaware limited liability company under review with negative implications. Northwind Holdings is a wholly owned subsidiary of Unum Group (Unum) (Chattanooga, TN).

Northwind Holdings was formed for the limited purpose of holding the stock of Northwind Reinsurance Company (Northwind Re), issuing notes and engaging in other activities incidental to the performance of its duties.

A.M. Best's previous review of the rating took into consideration the following factors: the financial strength rating (FSR) of Unum; Northwind Holdings' stand-alone rating (i.e. rating of the notes without the support of the financial guarantor) of "a"; work performed by Tillinghast, a business of Towers Perrin, including analysis and review of the adequacy of the reserves and the development efforts between Unum and Tillinghast of the policy cash flow projections, risk factors and assumptions used in the deal model; and a review of the structure, legal documentation and regulatory environment including trigger mechanisms that potentially impact and/or constrain Northwind Re's ability to distribute dividend payments to Northwind Holdings. Consideration also was given to the review and analysis of the deal model including additional deterministic stress and shock testing to sensitize the cash flow projections based upon A.M. Best's view of various key risk factors such as incidence rates, lapse rates, mortality rates, recovery rates, interest rates and investment conditions and the payment assurance of MBIA Insurance Corporation (MBIA), the financial guarantor, which insures the timely payment of scheduled interest and the repayment of principal at maturity to the note holders.

The under review status of the rating of Northwind Holdings is due solely to A.M. Best's concerns regarding the financial and operational pressures currently being experienced by MBIA and the change in its short-term credit profile resulting from its subprime mortgage-related exposure. A.M. Best will continue to monitor MBIA's capital strengthening activities to assess any further impact to Northwind Holdings' rating (both long and short term).

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Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.